CHICAGO—South Street Capital, a Chicago based, privately controlled real estate investment firm, has decided to expand the scope of its acquisition strategy into several Midwest states and core areas on the West Coast.

In the next two years the company plans to acquire about one million square feet of office, retail and multifamily properties in markets such as Chicago, Minneapolis and Indianapolis as well as core areas of Orange County and Los Angeles.

“Chicago, Minneapolis and Indianapolis are three key Midwestern markets where rents are generally stable or growing in the core downtown areas while at the same time asset valuations remain at or below replacement cost,” Marc Muinzer, founder of South Street Capital, tells GlobeSt.com.

Furthermore, the firm also seeks to acquire about one million square feet of self-storage assets in several Midwest markets including Minneapolis, Cincinnati and Indianapolis as well as in key submarkets of Dallas, Austin and Houston.

“I view the self-storage asset class as a hedge for if and when the economy slows down or falters,” Muinzer adds. “It performed exceptionally well during the last economic downtown.”

Many other investors and industry experts agree with that assessment. “The growth rates in the industry are gargantuan,” Marc Boorstein, president of Chicago-based MJ Partners Real Estate Services, told GlobeSt.com earlier this year. His firm issues quarterly studies on the industry and recently found that the revenues for Public Storage, the largest owner-operator in the US, increased 5.4% in 2014 and three other major REITs did even better. “The increases in rents and revenue are unbelievably consistent.”

South Street Capital's shift comes just after it capitalized on a robust commercial real estate market by selling a substantial portion of its loft office and retail portfolio located in the Gold Coast, River North and West Loop neighborhoods of downtown Chicago. The recent sale of 1165 N. Clark, located in Chicago's Gold Coast neighborhood, for $22.75 million to AIMS Real Estate, an affiliate of New York-based Goldman Sachs, was just a portion of asset sales that totaled about $50 million. In addition, the company has exited all investments located in the Goose Island neighborhood of Chicago.

“Following the disposition of a number of our real estate holdings located in downtown Chicago over the last twelve months, we are eager to accelerate and expand our acquisition pipeline,” adds Muinzer. “We are constantly evaluating our portfolio and looking to opportunistically exit niche real estate investment sectors and submarkets when they become overly popular. At the same time we continually look to redeploy capital into areas that are receiving less attention. With our recent success, South Street Capital is in a position to quickly execute on new acquisition opportunities.”

Muinzer founded South Street Capital in 2002. Its goal has been to acquire under-performing assets and turn them into stabilized, cash flowing properties before monetizing the investments.